Fixed Income

On Monday, risk markets opened on the front foot after largely shrugging off the weekend’s geopolitical news. Stock markets rallied, led by large-cap energy companies that stand to benefit from the "opening" of Venezuelan oil markets, while credit spreads were tighter across the board, continuing the positive trend seen at the end of last year.

TwentyFour Asset Management’s Felicity Juckes shares her take on volatility in Q4 and why we remain optimistic on credit heading into 2026.

TwentyFour Asset Management’s Gordon Shannon explains how resilient US economic activity and evolving Federal Reserve dynamics shaped Q4 and why we remain focused on high-quality credit heading into 2026.

TwentyFour Asset Management’s Douglas Charleston highlights 2025 as another year in which European ABS delivered solid positive returns over risk-free rates, with lower-than-expected volatility despite ongoing geopolitical uncertainty.

2026 began with the global acknowledgement that the TACO mantra (Trump Always Chickens Out) does not apply to foreign policy. We believe this sends a clear message to leaders of small and medium-sized countries opposing or refusing to cooperate/negotiate with the Trump administration.

The new year has begun with a jolt for market participants after the US carried out a military operation in Caracas over the weekend, capturing Venezuela’s president Nicolas Maduro and his wife.

European ABS investors saw just the second solar loan-backed deal price recently, a German offering titled Golden Ray 2. The transaction marks a further incremental development towards sustainable financing in the European securitisation market. It also comes at a time when the much larger and established US solar market has encountered headwinds.

It is the nature of financial markets that the trends and risks investors have their eye on at the start of the year are seldom the trends and risks they have their eye on by the end. Below is a selection of charts depicting some key trends we have seen develop in 2025, all of which we believe will have implications for investors heading into 2026.

You can now watch the replay of our webinar: Charting the Path for Fixed Income in 2026.

As we approach the end of 2025, we have been taking stock of the key themes of the year and any lessons we can take from them. It has been a strong year for European high yield (HY) credit, with solid performance for the index as a whole and average yields compressed by around 40bp over the course of the year.

Nothing beats an 11-hour flight back to London for evaluating the outlook for collateralised loan obligations (CLOs), having attended the Opal CLO conference in California.

Looking ahead, we expect continued inflows, rising demand, and reduced supply to support EM hard-currency bonds. For EM local-currency bonds, we believe the current macroeconomic environment remains favorable, despite our conviction in a USD bear market being lower than it was a few months ago.